TAX BILL EN ROUTE

House Republicans thought they’d finished their tax work they passed a version of the tax bill Tuesday afternoon. The measure passed 227 to 203, with all except 12 Republicans voting for the bill. Zero Democrats supported it.

But the plan hit a minor snag Tuesday afternoon when the Senate parliamentarian ruled that the three of its provisions violated the chamber’s Byrd Rule — guidelines on what types of legislation can pass with 50 votes.

Senate Republicans aim to pass the measure with a series of minor changes. None of the changes are expected to cost the plan any GOP support, but it will require the House to vote again as identical versions of the bill must pass the House and Senate before Trump can sign it into law. House GOP leaders asked their members to be ready to vote again by 10 a.m. Wednesday morning.

Middle-income households will get $61 billion in tax cuts in 2019 under the Republican tax plan poised for passage this week, according to an analysis released late Monday by Congress’s Joint Committee on Taxation.

That amounts to 23% of the tax cuts that go directly to individuals. By 2027, however, these households would get a net tax increase, because tax cuts are set to expire under the proposed law.

Among the provisions that made business leaders happiest was one that went missing in the final bill: the corporate alternative minimum tax. Its survival in the Senate bill provoked widespread consternation, as business groups worried that it would undercut a variety of tax incentives, including one fostering research and development.

Also welcome: the 21% corporate tax rate, despite being a percentage-point higher than either the House or Senate bill proposed. “That’s a home run, there’s no other way to look at it,” Mr. Bradley said.

The rate takes effect on Jan. 1, a year sooner than proposed in the Senate bill. That promises firms an extra year of lower tax and avoids a delay that worried many tax experts.

President Donald Trump and congressional Republicans are betting their tax overhaul will jolt the economy after a long but slow expansion. A sharp cut in the corporate-tax rate is meant to spur business investment and hiring. A rewrite of taxation for international profits is meant to bring corporate funds home. Lower individual rates are meant to give households more money to spend or bolster their finances. Fewer breaks, in theory, would make the economy more efficient.

Still, the case for faster growth is murky when looked at through the lens of history and no sure thing now. The 1960s and 1980s saw solid economic growth after Democrats and Republicans lowered individual and corporate rates. But U.S. growth languished in the 2000s after two rounds of tax cuts, and a tax increase on high-income households in 1993 didn’t hamper a building economic boom.

The two most popular games for the very wealthy will be running their income through pass-through companies, which pay a lower rate, or using a corporation to pay themselves a tiny salary and huge dividends, which will be taxed at the lower capital gains rates. (Watch for this headline in 2018: “Record Number of New Start-Ups.” But don’t necessarily take that as good news; many of those “new” start-ups will be individuals incorporating themselves.)

And private equity and real estate executives, as has been well documented, will make out like bandits under the new system.

According to the Tax Policy Center, 5 percent of taxpayers would pay more in taxes in 2018; 9 percent in 2025 and 53 percent in 2027, if the plan is signed into law.

Opposition to the bill has grown 10 points since early November, and 55% now oppose it. Just 33% say they favor the GOP’s proposals to reform the nation’s tax code.

Two-thirds see the bill as doing more to benefit the wealthy than the middle class (66%, vs. 27% who say it’ll do more to benefit the middle class) and almost four in 10 (37%) say that if the bill becomes law, their own family will be worse off. That’s grown five points since early November. Just 21% say they’ll be better off if the bill becomes law.

The $1.5 trillion tax bill heading for a vote this week is a big win for corporations overall. But not every business benefits equally, with bigger cuts flowing to financial firms and the real estate industry than to manufacturers or mining companies, a new economic analysis finds.

The disparities illustrate the difficulty in tailoring tax cuts for two of the blue-collar industries that Mr. Trump frequently promises to invigorate through economic policy changes. That’s in part because both mining and manufacturing companies already benefit from relatively low effective tax rates among Americans companies.

They also show how the tax plan is likely to shower benefits on the industry Mr. Trump built his fortune in — and on the Wall Street firms he railed against and has promised would not benefit from the bill.

As U.S. President Donald Trump plans to offer what he calls a “Christmas gift” to American workers and businesses in the form of a tax overhaul bill, global investors are more ambivalent. Fund managers surveyed by Bank of America Merrill Lynch in December are evenly split on the need for stimulus — after a string of years in which fiscal policy was deemed to be too restrictive.

BITCOIN, CRYPTO

A cryptocurrency exchange in South Korea collapsed on Tuesday after it suffered a second cyberattack in eight months and lost a large amount of its digital-currency reserves.

Yapian, the company that operates a Seoul-based exchange called Youbit, suspended digital-currency trading and filed for bankruptcy after its systems were hacked in the predawn hours of Tuesday. The exchange trades 10 virtual currencies including bitcoin and ethereum.

Yapian said in a statement that the latest security breach caused it to lose 17% of its total assets. The company didn’t specify the type of virtual currencies that were stolen or the financial value of its losses. The previous cyberattack, in April, also resulted in losses from its reserves.

U.S. securities regulators on Tuesday temporarily suspended trading in the shares of Crypto Company, a small firm that saw its stock rise more than 2,700 percent this month after signing a deal to buy a cryptocurrency data platform.

The U.S. Securities and Exchange Commission cited concerns about the “accuracy and adequacy of information” about the Malibu, California-based company available to investors. The suspension will remain in place until Jan. 3.

“Questions have also arisen concerning potentially manipulative transactions in the company’s stock in November 2017,” the SEC said in a Monday press release.

Speaking at CoinDesk’s New York headquarters, Byrne explained how he’s partnering with Peruvian economist and “The Mystery of Capital” author Hernando de Soto to launch a new Overstock subsidiary, called De Soto Inc., that he believes will be compatible with the token sale it will carry out for tZERO.

As previously reported by CoinDesk, tZERO is an SEC-regulated alternative trading system (ATS) – also known on Wall Street as a “dark pool.” As De Soto Inc. unlocks capital in the developing world, tZERO will be able to serve it as a capital market, at scale. Since each venture will have blockchain technology at their core, there will be a natural symbiosis, according to Byrne.

Many who bought bitcoin years ago now find themselves sitting on an untouchable bounty. Because they can’t remember the complex security codes needed to get to their bitcoins, the coins are in a kind of purgatory. It’s like forgetting a bank account password, but there’s no bank to call to reset it.

These bitcoin owners have watched in anguish as its price surged over 20-fold at times this year to more than $19,000. (It traded around $18,000 Tuesday morning.) Even technology titans have found themselves in the predicament: Elon Musk tweeted last month that he’d misplaced part of a bitcoin.

SAUDI ARABIA

After two years of austerity, Saudi officials rolled out plans that seek to balance the need to rebuild state coffers while avoiding crippling private businesses. An expanding economy could make it easier to advance key elements in the prince’s long-term plan in 2018, including selling a stake in state-run oil giant Aramco to help create the world’s largest sovereign wealth fund.

Saudi Arabia said Tuesday it intercepted a ballistic missile south of its capital that was fired by a rebel group in neighboring Yemen, raising regional tensions amid Saudi claims that Iran is behind a string of similar attacks while supplying the rebel fighters with weapons.

The attempted missile strike marked the second time that the rebels, known as Houthis, have targeted Riyadh since early November in retaliation for Saudi-led attacks seeking to break the rebels’ grip on parts of Yemen.

FBI SMEARS, RUSSIA PROBE, MEDDLING

A Fox News guest-host on Tuesday suggested the FBI plotted to assassinate President Donald Trump before he took office. While discussing the text messages of two bureau agents formerly working on the FBI’s probe of Russian election interference, right-wing radio host and Outnumbered guest-host Kevin Jackson said he hopes the Senate Judiciary Committee presses deputy FBI chief Andrew McCabe on whether certain texts point to a specific intent, “whether it was an assassination attempt or whatever.”

A stunned host Harris Faulkner replied, “Whoa, whoa,” but Jackson pressed on: “I’m just saying, we don’t know what it was. When [the texts] say, ‘We’ve got to make sure that this guy doesn’t get in at all cost,’ what does that mean? So I’m saying there’s a spectrum of what does it mean.”

Seeking to distance her show from a conspiracy theory, Faulkner attempted to clarify: “I just want to make sure that we press in on the fact that no one has floated any sort of an idea.” But Jackson replied: “Oh, it’s been floated. When I talk about this, I’m talking about social media stuff and, you know, that’s out there, I’m not talking about media sources.”

The Senate intelligence committee has asked for documents from Green Party presidential candidate Jill Stein as part of its probe into Russian interference in the 2016 election, adding another new thread to the panel’s investigation as it heads into next year.

Stein said Tuesday that she was cooperating with the probe and providing documents to the committee. She has captured the interest of investigators partly because she attended a 2015 dinner in Moscow sponsored by Russian television network RT with Russian President Vladimir Putin.

The Senate Intelligence Committee chairman, Richard Burr, R-N.C., appeared to confirm the investigation’s new focus on Stein on Monday. Asked what the committee wanted to know about from Stein’s campaign, Burr responded: “Collusion with the Russians.”

What’s particularly frightening about Cambridge Analytica and SCL, Molly McKew, an information warfare expert and specialist on Russia-US relations notes, is that they are operating internationally to supposedly influence elections outside of where they are operating, in the US and elsewhere.

“Nobody wants to believe that information, coming from some place they don’t really understand, could change how they think or what their decisions are, but it can—for any of us,” McKew tells Mother Jones. “Why does some company incorporated in the United Kingdom have [our data]? What the hell is that for? If it were just about selling shoes, or getting you to buy vitamins or whatever crap—ok, fine. But that’s not what it’s being used for, and they specifically say that. [SCL] is a company that’s marketing themselves as a military-grade psychological warfare and psychological operations company. That is a problem for all of us.”

Academics, lawmakers and journalists have raised the possibility that Russian entities might have used social media around the time of the referendum — known as Brexit — just as the Kremlin was aggressively exploiting Facebook, Twitter and other platforms to try to influence the American presidential election.

Members of Parliament have asked the social media companies for information, fearing that Russia might have tried to undermine confidence in British and European institutions, as it did in the United States. Weakening or dividing the neighboring European Union has long been a priority for Russia, so its use of similar social media tactics to sow discord here has been widely presumed.

But the study, from the Oxford Internet Institute, indicates that evidence is scarce, even taking into account the patterns already disclosed in the United States.

Gen McMaster told the BBC’s Yalda Hakim: “We have to look at what Russia’s actually doing. Of course we have to counter Russia’s destabilising behaviour, and the sophisticated campaigns of propaganda and disinformation.”

Those were “efforts to polarise communities and pit them against each other, especially in the democratic world and free and open societies”, he added, saying that the intent was to “weaken their popular will and their resolve”.

“I believe that Russia is engaged in a very sophisticated campaign of subversion to affect our confidence in democratic institutions, in democratic processes – including elections.”

Miller’s alleged victim, who asked to remain anonymous, said she is coming forward now in part because of the societal awakening to issues of sexual assault and harassment that has come in the aftermath of misconduct allegations that have rocked the entertainment industry. The Daily Beast is withholding her identity because of her fears of retribution. But for the purposes of this piece, we will call her Sarah.

Miller has told friends over the years that he was wrongfully accused. And in a statement to The Daily Beast, Miller and his wife, Kate, denied any wrongdoing. Instead, they cast themselves as the victims.

Bosses and fellow laborers treated them as property or prey. Men crudely commented on their breasts and buttocks; graffiti of penises was carved into tables, spray-painted onto floors and scribbled onto walls. They groped women, pressed against them, simulated sex acts or masturbated in front of them. Supervisors traded better assignments for sex and punished those who refused.

That was a quarter-century ago. Today, women at those plants say they have been subjected to many of the same abuses. And like those who complained before them, they say they were mocked, dismissed, threatened and ostracized. One described being called “snitch bitch,” while another was accused of “raping the company.” Many of the men who they say hounded them kept their jobs.

The wave of sexual harassment claims has toppled powerful men in entertainment, media and politics. Now, it is also creating permanent changes in workplace policy at one giant technology company.

Microsoft, one of the world’s biggest software makers, said on Tuesday that it had eliminated forced arbitration agreements with employees who make sexual harassment claims and was also supporting a proposed federal law that would widely ban such agreements.

RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS

Even as Republicans are poised to pass a $1.5 trillion tax-cut bill, a brewing fight over federal funding may lead to a government shutdown at week’s end. Speaker Paul Ryan plans to pass a continuing resolution later this week to fund the government until Jan. 19, but there are major disagreements within the House GOP over the move. There are also disputes between House and Senate Republicans, as well as the ever-present struggle with Democrats.

Right now, no one on either side of the Capitol has any clear idea how this three-way funding fight will play out, but all the major factions are digging in. Lawmakers and aides said the House and Senate could end up “ping-ponging” a spending bill back and forth until the issues are resolved, although some worry that Congress could blunder into a shutdown. Ryan on Tuesday instructed lawmakers not to leave town, signaling how concerned leadership is about the Friday funding deadline.

Specifically, 32% of investors surveyed in December said they viewed being long bitcoin as the most crowded position. Coming in second place is the long FAANG (Facebook, Amazon, Apple, Netflix Google) and BAT (Baidu, Alibaba, Tencent) trade, with 29% of responders mentioning it, BAML’s data showed.

A borrowing binge by companies and governments has reached a new high this year, providing bumper fees for Wall Street but raising questions ahead of a year of expected tightening of cheap money by the world’s most important central banks in 2018.

Blue-chip corporate borrowers such as AT&T and Microsoft have led the way, as companies accounted for more than 55 per cent of the $6.8tn raised in 2017 through bond sales organised by banks, according to data provider Dealogic.

“In 2017, there was such an influx of capital coming into high-quality fixed income. It’s a demand-fuelled story,” said Gene Tannuzzo, a portfolio manager with Columbia Threadneedle. “If you are a sovereign or corporate, with interest rates where they are, you are supposed to borrow now.”

It’s one of the most crowded trades for good reason. But dizzying returns and a surge of inflows have put emerging markets on a narrow precipice.

After several false starts, economists are predicting next year will finally be the one in which borrowing costs get a significant leg-up. The International Monetary Fund is warning it could mark the tipping point for emerging-market bond funds sitting on the biggest annual inflows since the financial crisis.

“It’s an increasingly uncomfortable equilibrium,” Societe Generale SA strategists including Jason Daw said in a December report. “Eventually, there will be a Minsky moment that will impair parts of the EM complex.”

The softening of the goal, decided earlier this month by the Communist Party’s top leadership, is an official acknowledgment of how hard it is for Beijing to wean the economy off debt-driven growth.

“Let’s face it,” said an official involved in policy discussions, “it’s not realistic to reduce leverage when the whole economy relies on banks for financing.” The International Monetary Fund and the World Bank have urged Beijing to tackle debt even if it squeezes economic expansion in the short term.

By tempering the stance on debt, Beijing is signaling it still seeks relatively high rates of growth and that more debt will be tolerated to reach that goal. For the world, that means greater demand from China for oil and other commodities, but also continued worries that Chinese debt could spiral out of control and hurt the global economy.

“The Chinese government is bowing to the complicated reality it faces, recognizing the risks of debt-fueled growth but unable to wean itself from rising debt levels,” said Eswar Prasad, a China scholar at Cornell University and the IMF’s former top official in China.

Government debt sales are set to more than double in 2018, lifting net issuance to $1.3 trillion, the most since 2010, according to JPMorgan Chase & Co. estimates. With the Federal Reserve shrinking its bond holdings and deficits poised to swell even before taking into account the tax overhaul, all signs point to higher financing costs.

The challenge for Mnuchin is that some analysts predict buying by central banks — a pillar of support this year — may fade, in part as international-reserve growth stabilizes. In the view of Credit Suisse Group AG, that will put the onus on more price-sensitive buyers, particularly a group that the Fed classifies as including households, hedge funds, private-equity firms and trusts for wealthy individuals.

MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS

The reason bitcoin uses a lot of energy is rooted in the way the bitcoin network operates. A digital currency, bitcoin is not controlled by any central bank or commercial clearinghouse but by a network of users who expend large amounts of computing power, and thus energy, building a so-called “blockchain” of bitcoin payments transactions.

To compile this comprehensive record, the bitcoin network relies on “miners.” Bitcoin miners have to perform a phenomenally large number of computer calculations to track and verify transactions and solve complex puzzles to obtain bitcoin rewards. As bitcoins become more popular and valuable, the puzzles miners face grow more difficult, and therefore the demand for high-powered computer processing grows as well. That means more energy usage.

“If the price of bitcoin continues to rise, it will continue to use more energy,” said Mike Reed, director of the Blockchain Program Office for Intel Corp. The reason, he said, is that the price represents “an economic incentive to add more mining equipment to the network … and that incentive is built in.”

If nothing else, the growing fortune of the 36-year-old Winklevoss twins is a reminder that for all the small investors getting into Bitcoin this year, the biggest winners have been a relatively small number of early holders who had plenty of money to start with and have been riding a price roller coaster for years. (The mysterious creator of Bitcoin, Satoshi Nakamoto, is believed by researchers to be holding on to Bitcoin worth around $19 billion.)

Some of these new Bitcoin millionaires are cashing out and buying Lamborghinis, professional hockey teams or even low-risk bond funds. The Winklevoss twins, though, said they had no intention to diversify.

“We still think it is probably one of the best investments in the world and will be for the decades to come,” Tyler Winklevoss said. “And if it’s not, we’d rather live with disappointment than regret.”

The Pantera Bitcoin Fund did not have to do much to get those returns. It just bought Bitcoins and held them as the price went up. Its performance is a reminder of the unprecedented gains that Bitcoin has experienced, with some analysts arguing that Bitcoin’s moves have been even greater than the movements of Dutch tulip bulb prices back in the 1600s.

But Dan Morehead, who founded Pantera Capital and the fund after a career at Goldman Sachs, said it was not an easy decision to create a Bitcoin-focused hedge fund in 2013, when Bitcoin was primarily known as a currency for online drug markets.

“The first hard part was actually deciding to launch a cryptocurrency fund when everyone else thought that was crazy,” he said on Monday.

Many of the investors in the Pantera fund have not enjoyed its full 25,004 percent return. Some bought in at the beginning and then sold out when Bitcoin’s price was in a slow steady decline during 2014 and 2015. Others bought in during the current boom and have reaped only the returns that Bitcoin has experienced over the last year. Those still aren’t bad, at around 1,900 percent.

Those gains have given Pantera a lot of competition. More than 150 hedge funds focused on virtual currencies have been created this year, bringing the total number of such funds to 175, according to the research firm Autonomous Next.

What gives the Bitcoin bubble significance is that, like ’90s tech, it is part of something much larger than itself. More and more we are losing faith in humans and depending instead on machines. The transformation is more obvious outside of finance. We trust in computers to fly airplanes, help surgeons cut into our bodies and simplify daily tasks, like finding our way home. In this respect, finance is actually behind: Where we no longer feel we can trust people, we let computer code take over.

Bitcoin is part of this trend. It was, after all, a carnival of human errors and misfeasance that inspired the invention of Bitcoin in 2009, namely, the financial crisis. Banks backed by economically powerful nations had been the symbol of financial trustworthiness, the gold standard in the post-gold era. But they revealed themselves as reckless, drunk on other people’s money, holding extraordinarily complex assets premised on a web of promises that were often mutually incompatible. To a computer programmer, the financial system still looks a lot like untested code with weak debugging that puts way too much faith in the idea that humans will behave properly. As with any bad software, it can be expected to crash when conditions change.

Bitcoin’s fans don’t entirely distrust human institutions. It is rather that they’d prefer not to need to trust humans to keep their promises, when we know that we humans are deeply fallible. That might seem cynical, but perhaps it is appropriately humble. As Satoshi Nakamoto, the pseudonym for the person or persons who invented Bitcoin, puts it, “the root problem with conventional currency is all the trust that’s required to make it work.”

This isn’t to idealize Bitcoin. Despite its virtual nature, it is still a human institution, facing its own misdeeds and governance problems. Odds are that Bitcoin may never function well as a general medium of exchange (something you can buy things with) because of its wild fluctuations, but might work fine as a store of value that you can sell. It may, like Netscape circa 1995, be portending changes to come. But Bitcoin has captured something. As much as we may love other humans, it is now in code we trust.

Between 1980 and 2016, the top 1 per cent captured 28 per cent of the aggregate increase in real incomes in the US, Canada and western Europe, while the bottom 50 per cent captured just 9 per cent of it. But these aggregates conceal huge differences: in western Europe, the top 1 per cent captured “only” as much as the bottom 51 per cent. In North America, however, the top 1 per cent captured as much as the bottom 88 per cent. These extraordinary facts prove that aggregate growth itself tells us very little — indeed, in the case of the US, virtually nothing — about the scale of improvements in economic welfare for the population as a whole.

These striking data come from the World Inequality Lab’s recently released World Inequality Report 2018. The broad picture is one of convergence among countries and divergence within them. But the latter has not happened to the same extent everywhere. Thus, “since 1980, income inequality has increased rapidly in North America and Asia, grown moderately in Europe, and stabilised at an extremely high level in the Middle East, sub-Saharan Africa, and Brazil.” The report also shows that, after the second world war, shares of the top 1 per cent were relatively low, at least by prewar standards, across the west. But, since then, these shares have jumped in the anglophone countries, especially in the US, but little in France, Germany or Italy.

Over the course of 2017, both in Congress and in the executive branch, we have watched the task of government devolve into the full-scale looting of America. Politicians are making decisions to enrich their donors — and at times themselves personally — with a reckless disregard for any kind of objective policy analysis or consideration of public opinion.

A businessman president who promised — repeatedly — that he would not personally benefit from his own tax proposals is poised to sign into law a bill that’s full of provisions that benefit him and his family. Congressional Republicans who spent years insisting that “dynamic scoring” would capture the deficit-reducing power of tax cuts are now plowing ahead with a bill so fast that they don’t have time to get one done, because it turns out they can’t be bothered to meet their own targets.

Meanwhile, in the background an incredible flurry of regulatory activity is happening out of public view — much of it contrary to free market principles but all of it lucrative for big business and Trump cronies.

Republican lawmakers say their tax overhaul would spur companies to hire more employees and build factories in the U.S. Yet one key provision, which will free up hundreds of billions of dollars for companies to spend, will probably benefit shareholders, analysts say.

Based on analyses of past programs to repatriate overseas corporate earnings, Wall Street analysts and tax experts expect companies would use the money for purposes such as mergers and buying back shares. Instead of adding jobs, they say, companies might cut them if they use their cash to buy rivals and then take out costs.

“There will be increased share repurchases, but limited impact on building new plants, real investment activity and employment,” said Dhammika Dharmapala, a University of Chicago law professor who has studied what U.S. companies have done with repatriated cash.

President Donald Trump insists he’s not going to fire Robert Mueller, but that’s not stopping Republicans and others close to the president from orchestrating a relentless stream of attacks on the credibility and integrity of the special counsel and his team of Russia investigators.

In the past week, investigators on Mueller’s team have been publicly accused of bias against Trump and of violating criminal procedure to get documents related to his transition. The purpose of the onslaught, according to people close to the White House, isn’t to encourage the president to oust the special counsel, a move that could precipitate a crisis in the Justice Department and potentially a move to impeach Trump.

Rather, these people said, the goal is to sow public doubt about Mueller and his prosecutors in advance of upcoming criminal trials — and to give the president political cover if he wants to start issuing pardons to any current or former aides swept up in the Russia scandal.

“It is definitely a smarter strategy than outright firing of Mueller, because that is likely to create a firestorm,” said Elizabeth de la Vega, a former assistant U.S. attorney from the Northern District of California. “It is also entirely consistent with Trump’s modus operandi because he is surprisingly nonconfrontational, preferring to be manipulative and, frankly, sneaky.”

A democracy is a country where the majority rules. A republic is a nation of laws. This was the founders’ number one priority. There’s that famous Ben Franklin quote, when they walked out of the Constitutional Convention in Philadelphia in 1787 and a woman saw him and asked, “Well, Doctor, what have we got, a republic or a monarchy?” He replied: “A republic, if you can keep it.”

Our republic—our system of laws—is under assault in a way I’ve never seen and I don’t think has ever happened. Richard Nixon was a lawbreaker. He was not utterly and thoroughgoingly lawless. There’s a difference. Donald Trump is a lawless president. It’s obvious to anyone who’s watching and isn’t in a state of contemptible denial that he feels constrained by no law. He cares nothing about the Constitution and he’ll lie about anything to anyone at anytime. That’s difference one.

Difference two: Nixon had no “news” channel defending and egging on his every lawless act. Trump, of course, does. That Fox chyron over the weekend, “A Coup in America?”, was shocking even for Fox. Referring to law enforcement agencies, to the FBI, as carrying out a coup? Because they have the audacity to investigate Dear Leader?

Difference three: Nixon also didn’t have a lawless Republican Party defending his moves and attacking his critics and trying to shut down an obviously legitimate investigation, but that is what we have now. Some Republican lawlessness has little to do with and in fact predates Trump: The party’s decision, for example, that the Constitution didn’t really mean that the president gets to appoint Supreme Court justices if he’s in his eighth year of service was completely lawless. The process by which they’re passing this tax bill is not exactly lawless, maybe, but it’s an offense and affront to this country’s norms and traditions. No hearings, no expert witnesses, no written bill, no regular order, no need for a cloture vote, no serious discussion with any Democrats even though four or five would have voted for a different bill, no Congressional Budget Office score, no normal conference committee process… All right, actually. Call it lawless if you want.

Kushner Cos. has a stake in more than 60 buildings in New York City, including Greenwich Village apartments and tony Brooklyn offices. In 60 percent of the properties, the Kushners own less than half of each, the analysis shows. In nearly half, they own less than 20 percent. In some high-profile cases, such as Brooklyn’s Watchtower Building, their ownership is in the single digits.

There’s nothing unusual about being a minority partner that manages or develops properties for others. But Kushner Cos. often projects a different image. On its website, for example, the company lists 80 and 90 Maiden Lane as a “key asset” despite its tiny, non-controlling share. In public statements, it sometimes conflates its own stakes with those of its partners. A release from last year describes the firm as having done $7 billion in acquisitions since 2007, a figure that can only be reached by including their partners’ funds. A similar release describes “reach” of more than “20,000 multifamily apartments, as well as 12 million square feet of office.” Those figures require compilation of properties where Kushner Cos.’ ownership is marginal.

Ownership isn’t the only way to make money in real estate. For companies that act as a general partner, as Kushner Cos. often does, management and other fees are common, as are clauses that allow operators to capture outsize gains if they exceed investment targets.

Still, the story of Kushner Cos.’ New York City expansion seems to be one of soaring ambition, international deal-making, and savvy public relations. In some ways, it is a Trumpian tale: a young man arrives in Manhattan and, with a little “truthful hyperbole,” as Trump once phrased his style, crafts a success that is larger than life. In the gap between image and reality, however, lurks a frequent reliance on investors and an ongoing risk of political influence.

Norway is to become the first Scandinavian country to decriminalise drugs as it focuses on treatment rather than punishment. The majority of the Norwegian parliament, the Storting, backed the historic shift which was supported by the Conservatives (Hoyre), Liberals (Venstre), the Labor Party (Ap) and the Socialist Left (SV). They directed the national government to reform its policies on drugs.

Sveinung Stensland, deputy chairman of the Storting Health Committee, told Norwegian publication VG: “It is important to emphasise that we do not legalise cannabis and other drugs, but we decriminalise. The change will take some time, but that means a changed vision: those who have a substance abuse problem should be treated as ill, and not as criminals with classical sanctions such as fines and imprisonment.”

This city on China’s Central Asia frontier may be one of the most closely surveilled places on earth.

Security checkpoints with identification scanners guard the train station and roads in and out of town. Facial scanners track comings and goings at hotels, shopping malls and banks. Police use hand-held devices to search smartphones for encrypted chat apps, politically charged videos and other suspect content. To fill up with gas, drivers must first swipe their ID cards and stare into a camera.

China’s efforts to snuff out a violent separatist movement by some members of the predominantly Muslim Uighur ethnic group have turned the autonomous region of Xinjiang, of which Urumqi is the capital, into a laboratory for high-tech social controls that civil-liberties activists say the government wants to roll out across the country.

It is nearly impossible to move about the region without feeling the unrelenting gaze of the government. Citizens and visitors alike must run a daily gantlet of police checkpoints, surveillance cameras and machines scanning their ID cards, faces, eyeballs and sometimes entire bodies.

CENTRAL BANKS & MONETARY POLICY

Despite being saddled with record household debt and wretched wages growth, Australia’s economy is showing signs of picking up steam, with hiring on a tear and firms investing. The dual narratives have prompted the central bank to sit still on record-low interest rates for 16 months, and now present Lowe with a dilemma for 2018: gauging just when the economy can handle a hike.

“The challenge is not to jump immediately from mission accomplished in housing into the next tightening cycle,” said Daniel Blake, an interest-rate strategist at Morgan Stanley in Sydney. “You want to see how this cooling housing market affects consumption spending, because some have ridden the asset-price growth and taken advantage of that, and others have followed in with a lot of leverage.”

USA ECONOMY DATA, CITIES AND STATES

Late Monday night, National Transportation Safety Board officials said that the train, bound from Seattle to Portland, Ore., was traveling at 80 miles per hour, on a curve with a limit of 30 miles per hour, when it jumped the tracks and careened into a busy highway and a stand of evergreens. At least three people were killed and about 100 were injured, officials said.

The accident mirrored Amtrak’s worst disaster in recent years, in 2015, when a train derailed at more than 100 miles per hour in Philadelphia, on a curve posted at 50 miles per hour, killing eight people.

The number of American deaths at work from unintentional drug and alcohol overdoses jumped more than 30% in 2016, new government data shows, showing that the U.S. struggle with a deadly opioid epidemic is migrating to the workplace.

The statistic is part of a bigger problem. Drug overdose deaths surpassed 64,000 last year, according to estimates by the Centers for Disease Control and Prevention. President Donald Trump in October declared opioid addiction, in particular, a national public health emergency.

Shoppers here spend about 30% more than state and national averages, according to the Census Bureau. Sales-tax receipts have grown 20% in the county since 2011, and city officials say there is not one vacancy in Wausau’s downtown shopping district.

But shoppers are spending relatively little at Wausau Center, the shopping center at the edge of downtown and the only enclosed mall for 70 miles. Sears closed last year there, and J.C. Penney left in 2014. So too have teen retailers PacSun and Aeropostale, Payless shoe store and even the Green Bay Packerland Plus superstore (though Packerland re-opened 10 miles away).

Wausau shows how an economically thriving community might shop in a post-mall age. No longer are shoppers willing to drive distances to hit a clothing retailer. That is an online task. They are willing, however, to make an event of going downtown, to the compact shopping district where two-story brick buildings line the streets, to patronize Wausau’s local boutiques.

Groundbreaking on single-family homes proceeded in November at the strongest pace in a decade, driving U.S. housing starts to a faster-than-estimated rate, government figures showed Tuesday.

The latest results make it more likely that residential construction spending — which subtracted from economic growth in the second and third quarters — will add to the pace of U.S. expansion in the October-December period, which is already shaping up as a solid quarter.

POSITIONING, INFLECTION, MARKET CALLS

At Monday’s close, 30 percent of the companies in the S&P 500 traded above their average analyst price target, data compiled by Strategas Research Partners show. In other words, stocks already reached levels where they’re expected to be 12 months from now.

“Believe it or not, this has historically been a bullish signal, consistent with above-average forward returns and positive hit rates,” Verrone wrote in a note. “The sell-side analysts are behind the curve and likely have to raise numbers.” There had been 12 instances since 2002 where a big proportion of stocks rose above their average price target. The S&P 500 posted positive returns 81 percent of the time three months later, with gains averaging 4.2 percent, data from Strategas showed.

FOREX, CRYPTOCURRENCY, EXCHANGE IMPACTS

Troubled that increasing illiquidity in the euro could widen its recent range versus the dollar and upset your Christmas? Option pricing seems to have a straightforward answer: don’t be.

In the run-up to the holiday season, and especially in the days around Christmas, liquidity in the market drops considerably, increasing the risk that a currency faces abrupt moves even on small volumes. This time around, option traders have little, if any concern, that this will be the case.

Yen analysts in Tokyo pretty much agree: the outlook for U.S. economic growth and interest rates will determine where Japan’s currency goes next year. And that’s where the consensus ends.

As with U.S. economists, Japanese currency strategists are divided on whether a strong American job market will propel inflationary pressures that finally send 10-year Treasury yields climbing. If they do, a widening U.S. yield advantage is seen lifting the dollar. Another year of disappointment would bring a stronger yen. A survey of nine forecasters by Bloomberg showed estimates ranging from 105 to 120 yen per dollar for year-end 2018. It was at 112.58 late on Tuesday in Tokyo.

ENERGY COMPANIES, NOCs, INDUSTRY

Russia’s natural gas exporter is channeling more money into the fight for market share as the U.S. threatens its biggest European pipeline project with possible sanctions and delivers tankers of fuel to the region.

Gazprom PJSC plans to spend 802 billion rubles ($13.7 billion) on routes to Europe and China in 2018, almost 41 percent more than this year, according to a draft budget prepared for a board meeting Tuesday that was seen by Bloomberg News. The biggest project is its Nord Stream 2 link to Germany, which had planned to start borrowing from banks next year before being singled out as a potential target by the U.S. in August.

COMMODITIES AGRICULTURE & SOFTS

Scientists around the world are rushing to find and develop new types of bananas, driven in part by a potential crisis in the supply of the Cavendish—the variety commonly found in supermarkets around the world. Bananas are one of the world’s most popular fruits, including in the U.S., which imports $2.3 billion worth each year.

The Cavendish is under threat of extinction from a fungal disease that is spreading across the world, killing the plants that bear the fruit. Cavendish bananas are seedless, so their plants are genetic clones, making them vulnerable to disease.

The soil-borne fungus is estimated to have damaged more than 30% of Asia’s and Australia’s banana plantations, and has made its way to Africa and the Middle East. If it reaches Latin America and the Caribbean, source of 85% of the world’s banana exports and the majority of American fruit, it could wipe billions of dollars from the export industry. The fungus affects some lesser-known varieties, too.

So scientists are roaming through rural areas and working in their labs in pursuit of possible alternatives—though it’s proving hard to find ones with consumer appeal. There are more than 1,500 types of edible and wild bananas, but they often look and taste peculiar. Some are squat. Some are red. Others fan out in semicircles rather than neat clumps. Many have seeds the size of peas. Some are mushy, have thin skins or ripen too quickly. Some are even self-peeling, hanging on plants with their flesh exposed.

POLLUTION, CLIMATE & ENVIRONMENT

If passed, it would be the third installment of federal disaster aid aimed at victims of hurricanes Harvey, Irma and Maria and more recent wildfires in California and other western states. Congress previously appropriated $15.2 billion in September and $36.5 billion in October; the House bill would bring total disaster funding for the year to more than $130 billion — far outstripping the federal spending in the wake of Hurricane Katrina in 2005 and Hurricane Sandy in 2012.

China released plans on Tuesday to start a giant market to trade credits for the right to emit planet-warming greenhouse gases. The nationwide market would initially cover China’s vast, state-dominated power generation sector, which produced almost half of the country’s emissions from the burning of fossil fuels last year. If it works as intended, an emissions market will give Chinese power companies a financial incentive to operate more cleanly.

The long-awaited announcement could bolster global efforts to combat climate change after President Trump signaled this year that the United States would back away from Obama-era promises to curb emissions. It could also serve as a big — though ultimately government-controlled — laboratory for such carbon markets, after earlier efforts in Europe and at the local level in China stumbled.

The U.S. General Services Administration, which runs most non-defense federal facilities, owns or operates 14.3 million square feet of buildings in the flood zone. That’s equivalent to nearly three Pentagons, spread across 14 states, the District of Columbia and the Virgin Islands.

Unlike private buildings, those structures aren’t required to follow local permitting rules for flood risk. And they don’t carry flood insurance. The greatest concentration of flood-exposed federal civilian buildings is in Washington, according to documents obtained by Bloomberg News through a government-records request.

Federal officials on Tuesday ended a moratorium imposed three years ago on funding research that alters germs to make them more lethal. Such work can now proceed, said Dr. Francis S. Collins, the head of the National Institutes of Health, but only if a scientific panel decides that the benefits justify the risks.

Some scientists are eager to pursue these studies because they may show, for example, how a bird flu could mutate to more easily infect humans, or could yield clues to making a better vaccine. Critics say these researchers risk creating a monster germ that could escape the lab and seed a pandemic.

BREXIT, SCOXIT, LONDON, UK ECONOMY

“There is no place [for financial services]. There is not a single trade agreement that is open to financial services. It doesn’t exist.” He said the outcome was a consequence of “the red lines that the British have chosen themselves. In leaving the single market, they lose the financial services passport.”

Investment banks in Britain would have to stick closely to EU rules on issues such as bonus caps after Brexit, under proposals the European Commission is set to make on Wednesday. The commission is planning tougher scrutiny of financial centres outside the EU that offer services to European clients, even as it insists that financial services will not be included in a Brexit trade deal with the UK.

Net immigration to the UK from the EU in the second quarter of this year fell to its lowest level since records began, according to official figures published on Monday. Some experts said Brexit appeared to have played a significant role in the decline in the number of EU nationals coming to the UK.

GEOPOLITICS, CRIME, TERRORISM

Two journalists arrested last week in Myanmar had obtained photographs from residents of a village in which, the country’s army chief has said, a mass grave was found. The area is in northern Rakhine State, where a military campaign against Rohingya Muslims has raged for more than three months.

At the time, Myanmar’s Ministry of Information said the journalists had tried to illegally procure information about Rakhine State, where international human-rights monitors say Myanmar’s military has killed and raped thousands of Rohingya. Ethnic Rakhine Buddhists, who comprise the state’s ethnic majority, have also been accused of participating in the bloodletting and burning of Rohingya villages.

Australia has been thrown into turmoil over allegations that China is trying to buy its politicians and sway its elections, charges that have led to increased scrutiny of the rising superpower’s efforts to influence Australia — and fears that a campaign to stamp out Chinese influence risks becoming a McCarthy-esque witch hunt.

The Chinese government has been using proxies in Australia for years to polish its image and press for its priorities, including reunification with Taiwan and sovereignty over the South China Sea. These efforts have intensified under President Xi Jinping, who seems to view Australia — which has benefited greatly from trade with China — as a laboratory for efforts to sway opinion abroad and increase China’s global influence.

PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE

The White House on Tuesday blamed North Korea’s government for a massive cyberattack in May that crippled hundreds of thousands of computers around the world, weeks after the U.K. had already cast blame on the country.

North Korea launched the virus, known as WannaCry, in a “careless and reckless attack” that damaged businesses and put lives at risk, Tom Bossert, the White House homeland security and counterterrorism adviser, told reporters. Hospital computer systems in the United Kingdom were hit by the attack, and schools and business were also affected.

The U.S. government rarely publicly attributes attacks to specific actors or countries. Mr. Bossert said the White House did so this time in the hope that publicly shaming North Korea might help deter future aggression.

TRUMP WORLD

Nearly one year after his inauguration, President Donald Trump’s approval rating sits at 35 percent, according to a new poll released Tuesday by CNN, a historic low for a commander in chief in the December of his first year in office.

The 35 percent approval rating is Trump’s worst mark yet in CNN polling. Fifty-nine percent of respondents said they disapprove of the way Trump has handled his job as president. Before Trump, no president dating back to Dwight Eisenhower ever had an approval rating lower than 49 percent in December of the first year in office.

Twenty years after Clinton fought accusations in a federal lawsuit brought by an Arkansas state employee, President Trump faces a state lawsuit that could open him to a similar predicament. The defamation suit brought by a female accuser could force scrutiny of Trump’s personal life and even make him take the stand. Now, his longtime lawyer hopes to quash the suit — by putting a new spin on the Supreme Court ruling that allowed the case against Clinton to proceed.

Marc Kasowitz has homed in on a single footnote in the Clinton case that highlights what he calls a key difference: Paula Jones brought her harassment suit against Clinton in federal court; Summer Zervos, a former contestant on Trump’s reality show, “The Apprentice,” is suing Trump in a state court.

And state courts, Kasowitz argues, have no authority over a sitting president. What’s more, the demands of fact-finding, depositions and court appearances are too time-consuming for the country’s commander in chief.

Trump, according to several people with knowledge of the discussions, was upset that Gorsuch had pointedly distanced himself from the president in a private February meeting with Sen. Richard Blumenthal (D-Conn.), telling the senator he found Trump’s repeated attacks on the federal judiciary “disheartening” and “demoralizing.”

The president worried that Gorsuch would not be “loyal,” one of the people said, and told aides that he was tempted to pull Gorsuch’s nomination — and that he knew plenty of other judges who would want the job.

It is unclear whether Trump’s “explosion,” as another administration official described it, truly put Gorsuch’s nomination in jeopardy or whether the president was expressing his frustration aloud, as he often does. But at the time, some in the White House and on Capitol Hill feared that Gorsuch’s confirmation — which had been shaping up to be one of the clearest triumphs of Trump’s tumultuous young presidency — was on the verge of going awry.

Mr. Petersen’s withdrawal over the weekend was the third nomination by Mr. Trump to collapse in recent days. Last week, the White House pulled back two other Federal District Court nominees who had attracted controversy, Jeff Mateer and Brett Talley. Mr. Talley also had scant trial experience and apparently defended the early Ku Klux Klan under a pseudonym on a sports website. Mr. Mateer once described transgender children as proof of “Satan’s plan.”

The departures were an embarrassment for the White House, which was responsible for vetting the prospective jurists, at the end of what has otherwise been a year of success on judicial nominations for Mr. Trump. He has rapidly begun reshaping higher levels of the federal bench by appointing deeply conservative judges.

Theories include revenge, ambition and old trial lawyer friends. John Kennedy is also genuinely distraught about the subpar quality of the White House’s picks.

Trump himself called up Kennedy over the weekend after a video went viral of the senator humiliating his pick for a district court judgeship. During a confirmation hearing, Kennedy pressed Matthew Spencer Petersen, who is currently the chairman of the Federal Election Commission, on his lack of relevant experience and stumped him with a series of basic legal questions.

Kennedy said Trump told him during their Saturday call that he did not personally interview Petersen and blamed his own staff for the crummy nominations. “He has told me, ‘Kennedy, when some of my guys send someone who is not qualified, you do your job,’” the senator told WWL Monday. (A White House spokesman did not respond to a request for comment about the conversation.)

SCANDALS, LAWSUITS, FINES, REGULATORY

Merrill Lynch agreed to pay $1.4 million to settle claims that it improperly extended hundreds of millions of dollars in excess credit to customers who traded certain bonds and equities with the firm, Wall Street’s self-regulator said Tuesday.

The brokerage firm, a subsidiary of Bank of America Corp., should have collected $475 million in additional margin or deducted $362 million of its own capital to cover the risk of a possible customer default on certain bond and equity trades, the Financial Industry Regulatory Authority said in an order announcing the settlement.

CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE

Germany’s top antitrust enforcer opened a new front against big tech firms on Tuesday, saying the way Facebook Inc. harvests user data constitutes an abuse of market dominance.

In what lawyers call a novel use of competition law, Germany’s Federal Cartel Office published preliminary findings that accuse Facebook of using its power as the dominant social network in Germany to strong-arm users into allowing it to collect data about them from third-party sources, such as websites with “like” buttons.

While Tuesday’s findings won’t lead to fines, they pave the way for Germany to order changes in the way Facebook does business when it issues a final decision as early as next summer. If upheld in European Union court, this new line of attack could eventually expand the boundaries of competition law within the bloc to encompass questions of online privacy.

Users are unaware that Facebook — seen as Germany’s dominant social network — gathers data on how they visit other websites and don’t appear to consent to how that data is used, the Federal Cartel Office, or Bundeskartellamt, said in an email statement.

People only have the choice to accept the entire package or stop using the network, it said, attacking “inappropriate” terms of service widely used by internet sites. The FCO says it isn’t investigating how Facebook collects information on how its users act on the social network, only on their internet habits outside of Facebook’s walls.

Facebook generates vast revenues from serving targeted advertising to users it knows well. German regulators may seek changes from the company, saying Facebook could now justify its conduct or “offer possible solutions” to address concerns that its data collection and use may be an abuse of its market power.

RETAIL APPAREL, SPECIALTY, DINING, BIG BOX

“Amazon is all about driving [speaker prices] to the bottom because for them it’s an entry point for e-commerce,” said Holger Mueller, an analyst at Constellation Research. Pricing the speakers at $30 makes consumers more likely to throw an Echo Dot in the basket, even if it wasn’t on their shopping list, he said.

The chain represents a whopping 20% market share of the fast-food industry, generating roughly $36 billion in US system sales. A 1% increase in McDonald’s sales means a 0.2% sales slip for the rest of the fast-food industry, assuming no growth in the sales base.

Analysts are anticipating that the new value menu will hit burger rivals including Wendy’s, Burger King, Jack in the Box, and Sonic especially hard.

“McDonald’s is such a big part of the industry that when they are doing well like they are currently, it is difficult for other burger [quick-service restaurant] chains to drive solid sales growth,” Brian Yarbrough, a senior consumer analyst at Edward Jones, told Business Insider.

GAMING, LIFESTYLE, RECREATION & LEISURE

More than two years after the Chinese restrictions sent profits tumbling, some analysts estimate that the Macau industry’s earnings could again start approaching records next year before hitting a new peak in 2019. Of course, any unexpected policy changes out of Beijing could crimp growth. But for now, the average forecast is for gaming revenue to rise 14 percent next year, a Bloomberg survey of 10 analysts shows.

VIP gamers are expected to be the biggest driver. But a flood of leisure tourists are also likely to pour in as glitzy new casinos and attractions open on Cotai — Macau’s equivalent of the Las Vegas strip. The four graphics offer a snapshot of Macau’s prospects in 2018 and beyond, and potential winners and stragglers among the casino operators.

AUTOS, ELECTRIC, SELF-DRIVING

BlackBerry Ltd. is betting its future on a business that makes software for next-generation driverless cars. Having abandoned production of its once-ubiquitous smartphones, the Canadian company recently refocused its mission around QNX, a core unit whose technology provides a foundation for car-entertainment and information systems. BlackBerry aims to double its QNX engineering staff to about 1,000 in the coming years and spend $76 million to create a center for self-driving car technology near Ottawa.

Waymo is racing against auto makers like General Motors Co. and tech companies like Uber Technologies Inc. to put a commercial fleet of autonomous vehicles on public roadways after years of testing. In a November speech, Waymo CEO John Krafcik said that “in the next few months” the firm was aiming to offer rides in its driverless vans to consumers in the Phoenix metro area.

Insurance companies are also considering how to respond to the threat driverless technology might pose to their businesses. As much as 80% of the premiums paid to car insurers are at risk of disappearing in coming decades if autonomous vehicles make driving safer and prompt big changes in car ownership.

Electric cars—which today comprise only 1 percent of auto sales worldwide, and even less in the U.S.—will account for just 2.4 percent of U.S. demand and less than 10 percent globally by 2025, according to researcher LMC Automotive. But while consumer appetite slogs along, carmakers are still planning a tidal wave of battery-powered models that may find interested buyers few and far between.

“When you hear people talk about the tipping point, it’s really that they’re counting the number of product offerings,” Hau Thai-Tang, Ford Motor Co.’s global head of product development and purchasing, said of electric cars. “Nobody can cite what the actual demand will be.”

Tesla is trying to convince the trucking community it can build an affordable electric big rig with the range and cargo capacity to compete with relatively low-cost, time-tested diesel trucks. This is the largest public order of the big rig so far, Tesla said. Tesla unveiled its semi last month and expects the truck to be in production by 2019.

The Tesla trucks will cost around $200,000 each for a total order of about $25 million. UPS expects the semi-trucks, the big rigs that haul freight along America’s highways, will have a lower total cost of ownership than conventional vehicles, which run at about $120,000.

MISCELLANEOUS

The deep sea can be a tough place to find food, and the creatures that live down here have adapted to its fickle abundance. They don’t just use tentacles to grab unwitting prey.

Consider detritivores, including crustaceans and even some jellies that eat them: They munch on decaying organic matter called “marine snow” that sinks down to the bottom from sloppy feeders or phytoplankton near the surface. And the black swallower fish: It uses its big jaw to swallow prey bigger than itself whole, like a snake. These different species show there are diverse ways to fill your belly in an unforgiving environment.

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